How safe are annuity providers?

groovygranny_2

First time posting though been following and using advice for many years!!!!

Will be 60 in February 2011. Have 3 pensions:

1. NHS - no problems

2. SAUL - no problems

3. Barclays personal pension with £30,000 in pot.

Have followed all the given advice. Been given two names with the best rates.

!. Aviva

2. Just Retirement


I have heard of Aviva, never heard of Just Retirement, but they offer the best rates (though only slightly better than Aviva) as they take in medical conditions.

How do I know how safe the providers are. What happens if one of them collapses?

Help

dunstonh

Have followed all the given advice. Been given two names with the best rates.

!. Aviva

2. Just Retirement

Dont assume they are the best. They are typically ones that appear at the top end frequently but not always. Although both providers do haggle.

Recently I have not found just retirement coming out as well as in the past for enhanced terms.

How do I know how safe the providers are. What happens if one of them collapses?

You are protected under the FSCS using the limits that apply.

groovygranny_2

Many thanks for your reply. I have checked out several and these are the best in my case. However, just before I fill in all the paperwork I just had a 'horrible' thought that the companies may be too good to be true!!!

dunstonh

groovygranny wrote: »

Many thanks for your reply. I have checked out several and these are the best in my case. However, just before I fill in all the paperwork I just had a 'horrible' thought that the companies may be too good to be true!!!

One assumes you are using an IFA then as just retirement don't retail direct to public (like most enhanced annuity providers).

Why are you filling in the paperwork and making the decisions on who to choose and not the adviser that is being paid to do it?

Cautious_Investor_3

dunstonh wrote: »

One assumes you are using an IFA then as just retirement don't retail direct to public (like most enhanced annuity providers).

Why are you filling in the paperwork and making the decisions on who to choose and not the adviser that is being paid to do it?

It's quite possible the IFA has simply sent the paperwork to the client for completion.

I have also come across the situation where an IFA recommends a 2nd, more 'household name' when someone like Just Retirement, Living Time etc, who are relatively new to the market and not as well known, comes up as the top provider i.e. both the lesser known company and the more well known are suggested.

The Cautious Investor

groovygranny_2

I received all my details from Barclays and realised the pension was a lot lower than I had hoped. I used the internet to find out what I could get elsewhere. One of the people on the internet was an independent broker who came back and agreed Aviva was a good one. However, when I mentioned I had slight medical problems (nothing too serious) they said they would investigative Just Retirement who may give me more pension.

Barclays have a form for me to fill in to clarify what I want to do, then the new Pension Advisor said I could send the forms to them direct and they would fill them in form me. Before I do that I wanted to check out the two pension providers. ( I don't tend to trust anyone who is trying to sell me something!!) One of the advantages of getting older

groovygranny_2

I have not so far paid an advisor - I have done all the research myself.

Cautious_Investor_3

groovygranny wrote: »

One of the people on the internet was an independent broker who came back and agreed Aviva was a good one. However, when I mentioned I had slight medical problems (nothing too serious) they said they would investigative Just Retirement who may give me more pension.

Hi

I'd hope that the IFA has already done this, but just make sure that they have considered more providers than simply Aviva or Just Retirement, there are a number of other enhanced annuity providers.

Also, check out the commission the IFA is taking, try and get them to reduce this for you, which will in turn get you a slightly better retirement income.....remember, everything is negotiable :cool:, the IFA needs to make a profit, but you need the best possible deal.

Hope this helps.

The Cautious Investor

Cautious_Investor_3

groovygranny wrote: »

I have not so far paid an advisor - I have done all the research myself.

He will get a commission from the provider, see my previous post.

dunstonh

However, when I mentioned I had slight medical problems (nothing too serious) they said they would investigative Just Retirement who may give me more pension.

Have they only checked Just Retirement of have they checked all the other enhanced annuity providers? I have been finding partership and MGM Advantage have been beating JR recently. Shouldnt they have checked the information first before agreeing a company was a good option?

There is a common quotation form where you input your personal details and the IFA can provide that to the various companies and they will come back with their figures based on that information.

Aviva was a good one

It is but one of their limitations is that the guaranteed period doesnt continue the income until the end of the guaranteed period but pays the outstanding income as a lump sum with a 35% tax deduction Most providers will continue the income until the end of the term without the 35% tax deduction. I assume you become aware of that in your research.

I have not so far paid an advisor - I have done all the research myself.

I fear that will lead you to a lower income figure as you will not be getting full coverage of providers and where you qualify for enhanced terms, that is vital. Open market option is one area where you dont save anything by going direct and doing your own research. The money they would have paid the iFA doesnt come to you. They keep it themselves. Plus, you wont get the benefit of haggling the price up.

I don't tend to trust anyone who is trying to sell me something!

You are not being sold to. You are buying. If you are paranoid then go fee basis or agree a fixed level of remuneration. However, the end result is effectively (baring financial security) the one that pays the most income.

Also, check out the commission the IFA is taking, try and get them to reduce this for you, which will in turn get you a slightly better retirement income.....remember, everything is negotiable

I doubt it on a £30,000 pot. thats £22,500 for annuity purchase. With the typical 1% commission, that's £225. I know many IFAs will actually tell them they are not interested in doing it on commission basis as the remuneration is too low. Aviva often pay enhanced commission (at no cost to consumer) but even at their typical maximum you are still only looking at just over £300.

Loughton_Monkey

Just as an aside. Barclays fund managers are probably the worst in the business. You are probably very disappointed with its value compared to your contributions.